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Including the $0.45 – $0.55 gas fee introduced last week,our average price per mile across four Tier 1 markets over this past weekend was $4.22, in line with 4Q21. This is higher than Jan-Feb levels (at $3.54), as price per mile had dropped 16% Q/Q in Jan-Feb (pricing has increased in March, but remains only slightly above historical levels). Across a broader set of Uber and Lyfts across 10 US markets, avg. price per mile was 7% higher today than in 4Q21 (at $4.58 today vs. $4.29 in October 2021), analyst Justin Post wrote in a client note.
The survey also showed that average wait times for Uber rides concerning Tier 1 markets are well below peak levels from 2Q21, at 4.1 minutes in March (vs. 5.7 minutes in 2Q21). Still, this is up from 3.6 minutes in Jan-Feb, according to a BofA analyst.
Net-net, Post remains positive on Uber. The analyst has a $55.00 per share price target on Uber shares.
Although driver supply concerns have increased with gas price increases, our data indicates that wait times are still better than 2021. We think driver supply risk may be elevated 1Q/2Q, with potential take rate pressure if Uber chooses to offset gas costs by more than the fee amount, given need for drivers to keep up with growing demand. Ultimately, we have noted that mobility in Urban areas is improving in March, and we think industry could pass through higher prices, Post said in a client note.
Uber shares are trading nearly 6% higher in pre-open after the company reached a deal to list all New York taxis on its app.
By Senad Karaahmetovic
